Blog description.

Accentuating the Liberal in Classical Liberal: Advocating Ascendency of the Individual & a Politick & Literature to Fight the Rise & Rise of the Tax Surveillance State. 'Illigitum non carborundum'.

Liberty and freedom are two proud words that have been executed from the political lexicon: they were frog marched and stood before a wall of blank minds, then forcibly blindfolded, and shot, with the whimpering staccato of ‘equality’ and ‘fairness’ resounding over and over. And not only did this atrocity go unreported by journalists in the mainstream media, they were in the firing squad.

The premise of this blog is simple: the Soviets thought they had equality, and welfare from cradle to grave, until the illusory free lunch of redistribution took its inevitable course, and cost them everything they had. First to go was their privacy, after that their freedom, then on being ground down to an equality of poverty only, for many of them their lives as they tried to escape a life behind the Iron Curtain. In the state-enforced common good, was found only slavery to the prison of each other's mind; instead of the caring state, they had imposed the surveillance state to keep them in line. So why are we accumulating a national debt to build the slave state again in the West? Where is the contrarian, uncomfortable literature to put the state experiment finally to rest?

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Friday, January 4, 2013

There Must Never Be A Compulsory KiwiSaver

Save
us all from crony capitalist government lobby groups. The Financial Services Council,
led by chief executive Peter Neilson, are trying to head the government toward a compulsory KiwiSaver because it will be ‘good for New Zealand’s economy’:

An
extra $52 billion could be injected into the New Zealand stock market by 2066
if 80 per cent of workers were in KiwiSaver and the contribution rate was raised
to a combined 10 per cent, according to research commissioned by a financial
services lobby group.

Infometrics
figures provided by the Financial Services Council project that $312 billion
would be channelled into KiwiSaver by 2066 if no change was made to the
existing regime, of which $39 billion could potentially be invested in locally
listed stocks.

[Snip]

The
council wants all workers including the self-employed to start contributing to
KiwiSaver from 2015, starting at 1 per cent a year and increasing by a percentage
point a year to 10 per cent by 2024. Those who are already in KiwiSaver would
also increase their contributions from 2024 from a combined 6 per cent a year
to 10 per cent.

At
present employees have to contribute a minimum of 2 per cent and employers a
further 2 per cent. From April that will go up to 3 per cent each to a combined
total of 6 per cent.

Last
year the Government deferred a proposal to automatically enrol all workers who
are not already in KiwiSaver until after 2014/15 …

I
don’t deny Mr Neilson makes some attractive arguments; obviously so because,
yes, savings are vital to a thriving capitalist economy: if you could put the
taxes you currently have extorted from you voluntarily into savings we would
all be better off in every way. However, the minute the country has forced on
it a compulsory savings into KiwiSaver from the Fortress of Legislation, then
its philosophically lost every gain that has been made, because a capitalist
economy is defined as a voluntary one – add compulsion, then there is merely
another planned, big state economy. Capitalism can only work, and works better
than any centrally planned mechanism, when individuals are left free to go
about the business of bettering their lives voluntarily, following their
pursuit of happiness, and rational self-interest. This is also the
pre-condition of a free country. Unfortunately, however, because 99 out of 100
professionals and business people, and 100 out of 100 lobbyists and politicians,
no longer understand the philosophical issues underlying a capitalist system,
by which I mean classical liberalism, I am forced to break this Herald piece
down on its own shallow terms:

Significantly,
never mentioned in Mr Neilson’s lobbying, there is a huge cost to business via
the compulsory employers contribution that employers must make, matching their employees contributions, that is ignored, completely, by him. He
is advocating that every small and medium sized enterprise (SME), including farms, in New
Zealand, that’s every entity which employs, is forced to give over the capital
they could use to grow themselves, and employ, so a very minute, elite group of
‘favoured’ firms listed on the New Zealand Stock Exchange can use those
extorted funds to further their own interests. Whoops, note already how philosophy
can’t be ignored: rational and fair people will rightly see this as first,
philosophically repugnant, and after that economically retrograde. This is
called crony capitalism, which, mixed with an uncritical MSM such as the lack
of balance in this Herald piece, simply accelerates us all down the road to our
serfdom.

Secondly,
not only is every SME stripped of their own capital via the employers
contribution, they also necessarily have to incur a higher incidence of income
tax to fund the government contribution to each KiwiSaver’s scheme, being 50
cents for each $1 invested. Yet more money taken from business owners to play
favourites and skew the open market for investment monies, given SME’s
investing their own money in their own businesses is the major part of the
investment market of any free country, and the KiwiSaver scheme is twice
attacking that important source of investment funding, namely, retained earnings
… (now repeat my philosophic arguments in above paragraph).

Finally,
considering the KiwiSavers themselves, for many, compulsory savings into
KiwiSaver will simply not be in their rational self-interest; they may well be prudent paying down their mortgages more quickly, than being forced
to invest in risky start-up ventures such as Xero, Bliss, et al, as good as
investment in some of those companies may indubitably be: investment has to
consider both risk and return of each individual.

Returning
to philosophy, also note how when a society moves to planned lives by state
coercion, we then arrive in the absurd, offensive circumstances where even free
speech is curtailed, and that most certainly in the investment sector of our
economy, for this very post is most likely, farcically, breaking our security laws (please note that’s a huge link
to a stunning post by Stephen Franks). And that single fact alone, is
appalling. I say it over and over, but there was a vital revolution for freedom
in America that was waged over less than the issues in this post (and almost
every post I make).

So
Mr Neilson, whose self-interest in the issues discussed in the Herald article
is never stated, assuming (?) he happens to work in the savings industry which
is increased in size dramatically by a compulsory KiwSaver, it’s still the
Christmas and New Year break: please take one, and leave businesspeople, many
of them struggling, brave entrepreneurs, alone – don’t make your career one of
convincing politicians their best course of action is to forcibly take the money
away, and hence the choices and opportunities, of these people who are our economy. And while on
businesspeople, to the real estate agent hassling me on New Year’s Day, and
then chasing me up the day after, for an independent trustee’s signature on a
sales document, that was rude; plain, old fashioned rude. Too many
businesspeople and professionals need to gain a bit of perspective and a lot of
philosophy.

4 comments:

I agree, compulsory Kiwi Saver will create a large pool of savings which will prove irresistable to a Government. A Government which will regulate where and how much we save will also regulate where those savings are invested, low interest Government Bonds or lossmaking "Green" projects for e.g.

Another point, the IRD administers the Kiwi Saver scheme which means that the Government knows exactly how much everybody has in their Kiwi Saver fund. I believe at some point in the future National Superannuation will be abated against Kiwi Saver income and there will be no escaping that because the IRD and WINZ are on very good speaking terms. Keeping the Government ignorant of ones financial affairs is a very good reason for avoiding Kiwi Saver.

Civilisation is a movement toward privacy, an Orwellian surveillance state the opposite, and tax legislation, especially tax administration, has become the legislation and administration of surveillance and authoritarian rule, in contravention of the rule of law, and common decency. IR

If the Founding Fathers could see how freedom is bound, again, under the iron fist of our taxing authorities; New Zealand's IRD, America's IRS, UK's HMRC, a secret police operating in every country, there would be a Western Spring.

This blog is the only form my protest can take, hoping not to become a squashed blug on the windscreen of state.

Disclaimer: If you pay anything other than the correct amount of tax - as hard as that can be to calculate under our mess of tax law - then you're a bloody idiot. The IR's are all-powerful: they are not a construct of a free, voluntary, civilised classical liberalism, they are a relic of totalitarianism. You have no liberty or privacy from the IR's, you have no legal defence against them, you cannot refuse to be interrogated, you cannot question their actions or seek judicial review holding them to account, even the burden of proof has been turned against the taxpayer; before the law, though you have done nothing wrong, you have less rights than a murderer or rapist, and this Department has been charged by the Fortress of Legislation to systematically eavesdrop and investigate all of us. Don't mess with them. And let me put on record, the IRD staffers I deal with daily are ‘good’ people, I have no complaint whatsoever on a personal/personable level; but this blog is about the principles involved, and it remains my hope there is enough of a classical liberal ethic left, admitting debate and ' difference', that this blog is taken only for the contained - to these pages - protest that it is. For let me spell it out - you, Big Brother State, have won: I.Am.Scared.Of.You.You bet I am. But there's this loon in me that can't seem to shut up. (You're lucky, my poor wife has to live with it).

Copyright

All posts copyright Mark Hubbard and Life Behind the IRon Drape. Contents may be reproduced without permission provided credit is given to the author, it is not altered in any way, the context is made clear and a link is provided to the original.